Suppose household annual demand for gasoline follows the equation QD =  2000 – 500P + 25I where P is the price of a gallon of gasoline and I is household income in 1000s of dollars. Suppose that P = 3 and I = 60. What quantity of gasoline will households demand at this price and income level? __________ What is the income elasticity of demand for gasoline at this price, income, and quantity level? __________ What happens to the income elasticity of gasoline demand if I rises from 60 to 100? It _____________ (rises/falls) to ______________. Does this change in elasticity make gasoline buying more or less sensitive to income changes?

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A: Price elasticity of demand (Ep) = % Change in quantity demanded / % Change in the good's own price

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Q: Question 5: (a) Define the Income elasticity of demand?

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A: (a) To determine the own price elasticity of demand (PED), we can use the following formula:In this…

Q: 5. Find the demar Elasticity of Dem 1) E(x) = 2 %3D ) E(x) = x, if %3= ) = , if 4 E (x) %3D

A: We can answer only one question per session. Since you've not specified which one you'd like…

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A: Income elasticity of demand (YED) is an economic concept that measures the responsiveness of the…

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A: Absolute of of price elasticity of demanded show below

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Q: None

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Q: price elasticity of demand

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